The IRS is fairly specific on the types of civilian employment is eligible for the Qualified Extended Duty when selling a personal residence.
Since you are a DoD employee then assume your duties would be covered by the following for the QED -
Any other office within the Department of Defense for the collection of specialized national intelligence through reconnaissance programs. Correct?
If so, then after your duty in Germany is completed, again assuming you will be working in an eligible position, you can sell your personal residence within two years after the duty ends in July 2027. So selling by July 2029 would give you the exclusion.
You would need to retain all paperwork from the employer that describes your position and validating your length of duty in the position while in Germany.
Also, when the home is sold the depreciation taken has to be recaptured when it was a rental. You will have to pay capital gains on the recaptured depreciation. This is separate from the capital gain exclusion when selling the personal residence.
